I’m Debt Free! I don’t have credit card, car, mortgage or any other type of debt!
At Equilibrium
On the Wells Fargo website I selected the send “Payoff form” option for my last mortgage payment.
I filled it out and printed it so that I can have Wells Fargo to pay our real estate taxes from our escrow. Now that they did that, I still have to pay our house insurance at the beginning of March, but… I sent in my last official mortgage payment!
Actually the check is sitting on my kitchen counter downstairs, waiting for me to put it in the mail. Tomorrow, I will drop it off at the post office, and then I will be finished with it!!! (Booyah)
I ended up paying off my house in 10 years.
So how did I do it?
Well, first I created an excellent excel spreadsheet to do some analysis on an amortization schedule.
Primarily, I used primarily 2 sheets in my spreadsheet:
- The actual payment was recorded to a sheet. This sheet was the real deal! As soon as I made a payment on the house, it was recorded in this sheet. Not much to this one, pretty cut and dry. At the top, I calculated the reduction in interest paid by pre-paying, the shorting of the life of the years of the mortgage by prepaying, and the total cost of the initial mortgage plus the interest.
- The “What If” analysis sheet. I used this to create a strategy to pay my house mortgage off early. I was able to calculate how different extra payments would affect the duration of the mortgage and also calculate the reduction in interest paid for the entire loan. I used this sheet so many times to calculation my payment schedule! It might not be obvious, but this was a great tool for wealth accumulation for me.
Next for the first year of the mortgage, I made double payments on the mortgage amount, with the excess going toward paying down the principal. Then later after my son was born, I lessened the payment amount to only 1.5 times the original payment amount.
I’m still in disbelief! I’m at a point of balance and having an “equilibrium moment”, so to speak!
As of this point forward, I will be solidly marching on a wealth-building path (or at least I hope, life sometimes throws some wild pitches at you…).
As the last phase of this final numbness wears off, I’ll tell you what it feels like being debt-free in a future post!
-MR
Update: An equilibrium moment is when something is in perfect balance! I don’t owe any debt anymore and nothing is owed to me either! With the “debt phase“, I’m in perfect equilibrium. This phase is over! I don’t plan on ever going into debt that I can’t pay in a month’s time again!
Here are some links to former post in the Countdown series